India is on the right track as it has been quite innovative on the policy side, including digital identity and payments, the International Monetary Fund (IMF) said.
According to the IMF, the Indian government should also take into account the significance of investments in financial institutions, oversight, and infrastructure in a long-term way – it would thus ensure that every piece fits together like a puzzle to fuel growth in the country.
“The goal is to have an economy and a financial system that can absorb shocks. Balance sheets can be better managed, Non-Performing Loans (NPLs) can be better managed,” Tobias Adrian, the director of the Monetary and Capital Markets Department of the IMF, told the Press Trust of India.
According to Adrian, the non-bank financial system can be improved, and capital markets have to be deepened and made more robust. There is the fintech agenda as well, which is important in India, as it is everywhere else in the world, he said.
“We are in the technological revolution in payment space. And I think India has been path-breaking in many of these technologies and payment systems. Now there is lending that is done in India that is not done anywhere else because the infrastructure is quite strong in this area. But of course, more can be done.”
India “has been quite innovative on digital identity, for example,” the IMF official added.
Last week, the IMF raised its fiscal year 2022 growth forecast for India to 12.5%, from the 11.5% estimated earlier in January. It said the country is the fastest-growing major economy and the only one expected to record a double-digit recovery from pandemic-hit 2020.
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